iFEEL INSTITUTE, LONAVALA:- presentation business environment on US-CHINA TRADE WAR

1. US-CHINA Trade War

2. What Is US- China Trade War
• In September 2018, US imposed a 10% tariff on $200 billion of
Chinese products
• China hit back with tariffs on $60 billion in American goods.
• Later, in May, Trump boosted the 10% tariffs to 25%
• US demanded that china must reduced its $375 bn deficit with US
give more access to US goods in Chinese market
• This has ignited a Trade War between US and China

3. Why US Is Doing This
• To increase employment in US
• To reduce the US- CHINA trade deficit
• To reduce the debt
• To maintain Its Leadership in the market

4. Why China Is Doing This
• To dominate the emerging digital
technologies is confirmed by its vision
Made In China 2025
• Tit-for-tat

5. Strength of US
• Idea + innovation
• Free market competition
• Technology
Strength of China
• Cheap labour
• Copying
• Manufacturing
• China Creates 80% of Air conditioners and 70% of mobiles

6. Effect of trade war on US
• U.S. Agricultural exports to China dropped by more than half in 2018.
• US federal funds rate rises more quickly than in the baseline forecast
in response to higher domestic inflation.
• Rise in financial stress adversely affect new credit flows and restrain
investment, industrial production and trade

7. Effect of trade war on China
• China has to pay more tariffs on the same products exported in us
• Results in decrease in demand of china products in us
• Companies can slight hit on their profit margin

8. How it affect Indian economy
The value of the Rupee
In the last one month, the value of the rupee has dropped to an all-time low, when in some occasions it was
hovering around the mid 68s against the US dollar. This coincided with Donald Trump’s threat of imposing a
fresh round of tariffs on exports worth $200 billion. This trend can be traced to the weakening of the US dollar,
which automatically creates a negative impact on the trade deficit of India, causing a chain reaction of sorts.
Indian stock markets
Amid concerns over the global trade war, key indices in the Indian share market dropped due to the cautious
approach of the investors. During this period, the BSE Sensex saw regular plunges in points. NSE Nifty’s
performance too was along the same lines as it also saw significant drops. As of now, the Sensex is trading at
about 37,521 (at the time of publication), which is still below the average.
India-US duties
As the United States of America imposed duties on steel and aluminium, India now has to pay approximately
$241 million worth of tax to the US. India, on the other hand, as a counter-measure has proposed imposing
duties on 30 different types of goods. This will ensure that the US has to pay about $238 million as duties to
India. However, this will make life more difficult for the end consumers as everything that falls under the tariff
scanner is expected to become more expensive.

9. Positive impact on India from trade war
• Decrease in price of crude oil in international market may result in
strengthening of Indian rupees
• Iphone will go into mass production in india this year, instead of China
• It is believed that the tension between both the countries could see Chinese
investment flow being increasingly directed towards India

10. THANK YOU